When it comes to online stock trading, I’ve always found Ameritrade to be one of the most accessible and reliable platforms for both beginners and seasoned investors. In this article, I want to share everything I’ve learned about Ameritrade stock trading over the years. I’ll take you through the features, account types, trading tools, and costs involved. Along the way, I’ll also provide some examples, comparisons, and calculations to help you understand the full picture.
Ameritrade offers a variety of investment options, from stocks and ETFs to options and mutual funds. Whether you’re just starting out or have been trading for years, the platform provides tools that suit different levels of experience. Ameritrade isn’t just about buying and selling stocks; it’s about giving you access to a wide array of resources and tools that can enhance your trading journey.
Table of Contents
Why Choose Ameritrade?
Before I dive deeper into the platform itself, I want to address a simple yet important question: Why should you choose Ameritrade for stock trading? I believe the answer lies in its combination of user-friendly tools, strong customer service, and a wide range of assets to trade.
Ameritrade offers a well-rounded experience for those looking to engage in stock trading. Whether you’re looking to buy your first stock, track your portfolio, or analyze market trends, Ameritrade has the resources to make it all happen. Plus, the platform is intuitive and simple to navigate, making it easier for me to stay on top of my investments.
Account Types
One of the first things I considered when starting with Ameritrade was the different account types they offer. The platform supports various accounts designed for different investment needs.
- Individual Brokerage Accounts: These are the standard accounts that allow me to trade stocks, ETFs, and options without any special tax treatment. This type of account is perfect for anyone looking to trade freely without worrying about additional restrictions.
- Retirement Accounts (IRA): Ameritrade also allows me to set up retirement accounts, such as Traditional IRAs and Roth IRAs. This is a great way to build wealth for the long term while taking advantage of tax benefits.
- Margin Accounts: With a margin account, I can borrow money from Ameritrade to purchase additional stocks. While this provides greater buying power, it also comes with higher risks due to the potential for margin calls if my investments lose value.
Each account type has its pros and cons. For example, margin accounts can be useful for experienced traders who want to leverage their positions, but I’ve always been cautious with margin trading due to the inherent risk involved.
Ameritrade Fees and Commissions
Understanding fees and commissions is crucial when it comes to trading. Ameritrade doesn’t charge a commission for trading stocks, ETFs, or options, which is a big plus for me. However, they do charge a small fee for certain trades and services, and knowing these fees can help me make informed decisions.
Here’s a breakdown of Ameritrade’s key fees:
| Fee Type | Cost |
|---|---|
| Stock and ETF Trades | $0 |
| Options Trading (Per Contract) | $0.65 |
| Mutual Fund Trades (No Load) | $49.99 |
| Futures Trading | $2.25 per contract |
| Margin Rates (Annual Percentage) | 11.25% – 12.75% |
As you can see, there’s no commission for stock and ETF trades. For options, Ameritrade charges $0.65 per contract, which is quite reasonable in the industry. I personally like the fact that I don’t have to worry about paying commission on my stock trades, which adds up to significant savings over time.
When it comes to mutual funds, Ameritrade charges a $49.99 fee for no-load funds. This is something to keep in mind if you plan to trade mutual funds regularly.
Trading Tools and Platforms
Ameritrade has a wide array of tools that I’ve used to make my trades more strategic and informed. They offer a web-based platform as well as a mobile app for trading on the go. But for me, the real standout is thinkorswim, a trading platform that offers advanced charting, analysis tools, and real-time data.
Thinkorswim: The Powerhouse
Thinkorswim is an advanced trading platform designed for active traders. While I found the learning curve a bit steep when I first started using it, it’s incredibly powerful once I got the hang of it. The platform offers features like:
- Customizable Charts: I can adjust chart types, indicators, and timeframes to fit my personal preferences.
- Paper Trading: This is a great feature for beginners like me. I can practice trading without risking real money, which helps me develop my strategies.
- Screeners: Thinkorswim allows me to create custom screens based on specific criteria, which is incredibly useful for finding stocks that meet my investment goals.
- Risk Analysis: The platform includes tools to help me understand and manage risk. This is something I use often when making decisions about how much to invest in a stock.
Overall, Thinkorswim is a powerful tool, but it can be overwhelming for beginners. If you’re just starting with Ameritrade, you might want to stick with the simpler web platform until you get more comfortable.
Ameritrade Web Platform
The web platform is more straightforward and easier to use compared to Thinkorswim. I’ve used it for everyday trading and found it to be more than sufficient for my needs. The interface is clean, and the charting tools are simple yet effective. There’s also access to research reports, real-time news, and educational resources, which make it a great option for both beginners and seasoned traders.
How to Buy Stocks on Ameritrade
When I first started trading, I was intimidated by the idea of placing orders. However, Ameritrade’s platform made it easy for me to understand the different order types. Here’s a quick guide on how to buy stocks on Ameritrade:
- Log into Your Account: After logging into your account, navigate to the trade tab on either the web platform or Thinkorswim.
- Search for a Stock: Use the search bar to find the stock I want to buy by entering the company name or ticker symbol.
- Choose Order Type: I can select from a variety of order types, including:
- Market Order: This order buys or sells a stock at the current market price.
- Limit Order: I can set a specific price at which I want to buy or sell a stock.
- Stop Order: This order becomes a market order once the stock reaches a specified price.
- Review and Confirm: After choosing the order type and entering the quantity, I review the trade and confirm the order.
Ameritrade makes it easy to understand the process of buying stocks, and the options available help me tailor my trades to my investment goals.
Examples of Trading with Ameritrade
Let’s look at a couple of examples to see how stock trading on Ameritrade works in practice.
Example 1: Buying Shares of Stock
Imagine I want to buy 100 shares of ABC Corp at $50 per share. I place a market order, and the total cost would be:
100 \, \text{shares} \times 50 = 5000 \, \text{USD}With no commission fees on stock trades, my total cost remains $5000.
Example 2: Trading Options
Let’s say I decide to trade options instead. I buy 10 call options contracts for XYZ Inc. with a premium of $2.50 per contract. Since each options contract represents 100 shares, the total cost would be:
10 \, \text{contracts} \times 100 \, \text{shares per contract} \times 2.50 \, \text{USD per share} = 2500 \, \text{USD}Then, I also have to account for the options trading fee of $0.65 per contract:
10 \, \text{contracts} \times 0.65 \, \text{USD} = 6.50 \, \text{USD}So the total cost of this trade is:
2500 + 6.50 = 2506.50 \, \text{USD}This example shows how options trading on Ameritrade works, with the additional cost of the contract fee.
Customer Service and Support
Ameritrade offers a wide range of customer support options, including phone, chat, and email. In my experience, their customer service is quick to respond and helpful in resolving any issues. Whether I need help navigating the platform or have a question about my account, I’ve always felt well-supported.
Conclusion
Ameritrade is a solid choice for anyone looking to get started with stock trading. It provides a range of tools, educational resources, and account types to suit various investment needs. The lack of commission fees on stocks and ETFs is a big plus, and the advanced features like Thinkorswim make it a great platform for more experienced traders. If you’re new to trading, I recommend starting with the simpler web platform and then moving on to Thinkorswim as you gain confidence. Overall, Ameritrade offers a well-rounded and accessible trading experience for both beginners and seasoned investors.
